The
only thing certain is change:it is
a constant.It is exciting that
technological advances can be destructive to various industries, while at the
same time creating new industries.

Back in the late
1940ís-early 1950ís the advent of television, and itís wide acceptance,
were supposed to be the death knell of the movie business.It didnít quite play out that way, but often a new development does
mean the end of an older industry.Now
television itself is coming under attack, as viewers find alternate means of
consuming entertainment.

Fountain pens are
mostly a relic now, replaced by the ballpoint or, lately, the stylus.The secretarial pool has been replaced by computers.Remember carbon paper?Typewriters?Hey, remember Fotomat?For
that matter, when was the last time you used a real camera?Poor Kodak.

Disruptive
technology is the term that we are using lately for developments that displace
older industries.Take music:before
Edison, it was sold as sheet music.Then
came shellac and vinyl recordings, 8-tracks, cassettes, and CDs.Today most music is ďstreamed,Ē delivered over the internet or via
satellite, changing and challenging traditional radio as well as conventional
music distribution.There are no more than a handful of record stores left.

The advent of the
computer, the internet and the cell phone, has meant, if not the demise, at
least the diminution of conventional mail, newspapers, and books, and
"e-commerce" now threatens brick-and-mortar retailers themselves.

Communication has
been radically altered.A hundred
years ago it was a marvel that we could talk to someone on the telephone;
fifteen years ago we were already taking our new cell phones for granted.Our children and grandchildren no longer even talk on the phone, they
text, and we all use the phone as our camera and as a hand-held computer.Instant information, right there in the palm of your hand.And a Verizon store on every corner, an Apple store in every mall.

Taxis now compete
with ride-sharing services like Uber, and NYC medallion prices have halved.Soon, it is promised, cars will drive themselves.And be powered by electricity.Computing
long ago left the giant refrigerated spaces that held mainframes, migrating to
our desk tops, and now our data is "hosted" in the "cloud."

From finance to
manufacturing to retail, there is hardly an industry that has not been changed
by technology, generally for the better, and the pace of change is only
accelerating.

Stock markets have
also been subject to radical change.Trades
are driven by algorithms and "black box" systems, executed in
nanoseconds by traders who may hold those positions for only marginally longer
than that.Giant pension funds may trade in "dark pools"
to hide their actions;hedge funds
hire people to monitor numerous esoteric things like weather patterns and retail
store activity.News is
disseminated at the speed of light.

The myriad new
industries that have sprung up create many potential opportunities.

So it is a new
world for everyone, but especially so for investors.We must be careful that the companies we have invested in, and sometimes
held for many years, are not distressed by new technology, that they can adapt
and be part of the new order.And
we must be constantly on the watch for new industries to invest in.Change brings opportunity, but also danger.We cannot simply get comfortable with what worked in the
past, nor can we blindly buy that which is new, as many will fall as quickly as
they rose.

Technology
aside, human behavior is remarkably resistant to change, and so markets continue
to fluctuate wildly.The Fed
continues to resist raising interest rates.Our quadrennial election cycles seem to descend ever-deeper into
irrationality, as people continue to believe that a different politician will
result in a different outcome.

As
for me, I am a pragmatist; you must prove it to me.You may say that I am stuck in my old ways, resistant to change.But I would rather continue with methods that have proven successful over
my lifetime, regardless of technological advances.Show me the numbers:I need
to digest the balance sheet, I need to be comfortable with the valuation of the
securities that I buy.I will
happily watch a new business as it develops over time, but I am unlikely to be a
buyer of such a company until it has proven itself to me.I repeat the mantra:quality
companies held over long periods of time, that is the formula for success.